10 Small Financial Changes To Make in 2017

Never underestimate the power of small financial victories.

Sometimes you make small changes, like paying an extra $20 each month towards your maxed out credit cards doesn’t always feel like it’s making a difference.  After all, what good is $20 bucks a month when you’re accruing hundreds of dollars in interest each month.

A larger impact than you think.




I’ve explored the power of my family’s personal small victories, and how they added up to big wins before, but today I want to really bring it home.

2017 is just beginning, and this is the perfect time to take charge by making some very small, highly impactful changes – these will make a bigger impact than you know.

Fair warning: this article is looong.  Currently, it’s over 4,000 words, and I’m assuming final edits will make it even longer as I fully flesh out everything in here.

So take your time with this, maybe print out the workbook at the end, then bookmark this to come back to it.

Bottom line: don’t try to do everything at once.  Pick the small changes that are right for you and your family and execute them.

And if they aren’t all right, that’s ok too!

The biggest thing I want to get across is that you make changes, and that you start making them today! Continue reading

The Gift of Freedom: The Comprehensive Guide To Establishing Your Child’s Credit

What is the mark of becoming an adult?

Is it your 18th birthday?

Your first car?

Your first apartment?

College graduation?

Your first house?

Technically, adulthood begins when a child turns 18, but since most are still in high school, I wouldn’t consider that the defining moment.

I’ll cut to the chase here and tell you that I believe adulthood begins when a child begins moving away from the parents, in the sense they they are financially, emotionally, and physically independent of them – with an emphasis on making their own money and decisions with how to utilize that money. Continue reading

The Complete Guide To Paying Off Credit Card Debt With A Balance Transfer

Fighting fire with fire.

More than once, I’ve heard that phrase used to describe completing a balance transfer for the purpose of paying off credit card debt, and the people that said it were right.

Credit cards are a dangerous thing when used incorrectly.  For most people, credit cards are easy to get, easy to use, and tough to pay off. The high interest rates (usually 15% – 23%) leaves you drowning in interest, barely touching the principal, paying thousands of dollars in interest each year.

But, if you’ve gotten yourself into some credit card debt, and are committed to paying it off, you have options.  After all, paying off a credit card while still paying exorbitant interest rates is like trying to swim upstream, against the current.  You can make progress, but it’s unbelievably hard.

{12 Things To Remember When Paying Off Debt Gets Hard}

Here are the most common ways to refinance credit card debt:

  • A personal loan
  • With home equity
  • A Balance Transfer

Today, we’re going to fight fire with fire and talk about balance transfers: who they’re right for, what you need to do it successfully, and what to watch out for.  Done correctly, regardless of you feelings about credit cards, you can save yourself a lot of time and frustrating by paying off debt after a balance transfer, rather than going the more traditional routes of a home equity loan or a personal loan.

How Much Is Your Credit Card Debt Costing You?

Credit card debt carries some of the highest interest rates of any type of debt, and is the undisputed “worst” type of debt to have.  The average American family has more than $15,000 in credit card debt, and at a low estimated interest rate of 15%, a minimum payment of $400 and paying $400 extra each month towards the debt, that family would pay $5,367 in interest over the 51 months it would take to pay it off!

Fighting fire with fire: is that what it takes to pay off credit card debt? Here's how to pay off debt with a balance transfer

In order to understand just how advantageous a balance transfer can be for you, you need to first understand just how much that debt will cost you in interest, and how long it will take to pay it off.

Try using this handy calculator from Credit Karma to find out that information.

You might be surprised at just how much interest you’ll be paying on your credit cards alone + how long it will take you to get out from underneath that credit card debt!

What Is A Balance Transfer?

A balance transfer is when you take the balance from one credit card (usually bearing a high interest rate) and transfer it to a newly opened credit card in exchange for a 0% interest rate for 12-15 months.  This cuts down on the interest payments by hundreds or even thousands of dollars, and give yourself a set time frame to pay off the debt within.

Why Is A Balance Transfer a Good Option?

Utilizing a balance transfer over a route with a traditional bank is advantageous for several reasons:

  • You don’t have to fill out tons of paperwork
  • Very little income information required
  • Instant, or very quick decision
  • Huge interest rate deduction

As long as you have good or excellent credit, you can apply for and be approved for a new credit card within a few minutes, all online, without ever having to set foot in a bank.  Credit card companies are required to be VERY transparent about the terms of the credit card, not only the interest rate, but any an all fees, the balance transfer terms, as well as any associated fees.

You can also get an interest rate advantage by completing a balance transfer, with most balance transfer interest rates hovering around 3%.  Some may be larger, and you can even find some that are 0%, but 3% is pretty common.  Let’s use $15,000 of credit card debt as the example and assume that you’ll be approved for the balance transfer credit card with a credit limit large enough to accommodate the $15,000 of debt.

In this case, you would pay a $450 fee for transferring your balance, well below the $5,367 in interest you were looking at.

If you choose the correct card, you can pay as little as 0% interest for 15 month, putting your payment right at $1,030 a month.

This is larger than the $400 minimum payment + $400 extra you were paying each month, but chances are you can find an extra $230 each  month to put towards the payment!  If you can’t, you should seriously look for ways to cut your budget for a few months, or put a few hours each week into making extra money.  The other alternative is to transfer your $15,000 balance, continue to p pay $800 a month towards it, and then transfer the remaining $3,450 to another balance transfer credit card for a few months to continue paying off the debt without racking up interest!

The ease of application, ease of use, and lower interest make transferring a balance to pay off a credit card faster a really good option if you have systems in place to keep from falling into credit card debt again (I’ll get into those in a minute).

The Best Balance Transfer Credit Cards

There are some truly great offers out there right now to help you pay off credit card debt – even though that’s not what they’re designed for.  These 0% for 15 month offers are supposed to entice you to open up a card and rack up large amount of debt on it so that the credit card company can make a killing charging you hundreds in interest each month.

But you can outsmart the system using these great balance transfer credit cards:

Barclaycard Arrival World MasterCard: 0% APR for 12 months on each balance transfer made within 45 days of account opening

Chase Slate: 0% APR for 15 months on balance transfers made within 60 days of account opening.  $0 annual fee.

Citi Simplicity: 0% APR for 21 months on balance transfers made within 60 days of account opening.  $0 annual fee, but a 3% balance transfer fee applies

Discover It Card: 0% APR on balance transfers for 18 months, $0 annual fee, and 3% balance transfer fee.

More: https://www.nerdwallet.com/blog/top-credit-cards/nerdwallets-best-balance-transfer-credit-cards/

Fighting fire with fire: is that what it takes to pay off credit card debt? Here's how to pay off debt with a balance transfer

What To Look Out For With A Balance Transfer?

Late Payments

If you decide that a balance transfer is right for you, it is important to make 100% sure that you can make your payments on time.  Not only can a single late payment cause your credit score to nosedive, it can have these other consequences:

  • A Late Payment Fee
  • Losing the 0% Intro purchase APR
  • A penalty APR
  • Losing your 0% balance transfer APR

The bottom line is that if you make a late payment, you risk losing every single promotional offer the credit card gave you, that is supposed to give you a leg up in paying off your debt, so don’t do it!

The Balance Transfer Fee

Balance transfer fees are typically 3%, but you can find offers that have a 0% balance transfer fee.  I listed a few of them above, and if you have excellent credit you should consider the 0% offers before the 3% offers.  There are so many balance transfer credit cards out there today that you should not even bother with a balance transfer fee greater than 3%.

The Balance Transfer Period

In order to find the right card for you, pay attention to the balance transfer period.  This is the length of time your balance transfer will remain at 0% interest.  Use this time period to calculate the monthly payment you need to make in order to pay off the debt before the interest rate rises, and then choose the credit card accordingly.

The Balance Transfer Interest Rate

Yes, even thought offers for 0% balance transfer interest rates abound, there are many offers with interest greater than that.  If your credit is good or excellent, don’t bother with offers that aren’t 0%.

The Monthly Payment

Finally, before you complete the application, be absolutely sure that you can make the monthly payment on time, every time, and in a big enough amount that you can pay off the debt before the balance transfer period expires.  A late or missed payment can completely undo what you’re trying to accomplish by completing a balance transfer.

Debt Recidivism Avoidance Systems

What is debt recidivism?  It’s getting back into debt again after paying it off, and it’s the worst feeling in the world.  I’ve been there and it sucks when you’ve worked so hard to pay off debt, only to let your guard down and start spending wildly again.

Luckily, there are some simple things you can do to prevent this:

  1. Take the credit cards out of your wallet
  2. Don’t just throw them on the kitchen counter, lock them in your safe so they’re hard to get to.
  3. Don’t allow online shopping sites to remember your credit card info

Consolidating credit card debt with a balance transfer can be an amazing tool.  As we saw in the example of $15,000 in debt, that simple act saved more than $5,000 over the course of 15 months.  That of course does not mean that it’s without risks.

But with proper planning and follow through, the benefits of credit card balance transfers definitely outweigh the risks.

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This post may contain affiliate links.  See my disclosures for more information.

What The Heck Is Credit Card Churning?

Bloggers have been making a big splash lately with headlines like

“How I Spent Only $14,000 Taking $195,000 Worth Of Trips Around The World.”

And while I’m all for a good headline – backed up by GREAT content, of course – I feel like there’s some explanation that needs happen before anyone can make claims like that.

When you read a headline like that, you automatically assume that some huge discounts + airline miles bonus went into that much cheap travel, I feel like much of the background story is missing.

How exactly does one find good credit card offers?

How do you keep spending responsible while still meeting minimum spend requirements?

How does all of this credit card craziness effect your credit score?

And what the heck is credit card churning?


After all, these incredible credit card scenarios go against everything we ever learned about responsible credit card usage:

  • Only carry the ones you absolutely need
  • Spend only what you can pay for in cash right then
  • Pay off your balance in full every month
  • Don’t apply for too many offers all at once

And if you go against these rules, you’ll automatically be penalized with a bad credit score, right?

Wrong.

A growing number of reward programs designed to entice more people to sign up for certain cards + creative thinkers and spenders have given birth to a new breed of credit card users: credit card churners. Continue reading

10 Things I’ve Wasted Money On + How You Can Avoid These Money Traps In The Future

Do you have a knack for making money mistakes?

So do I!

We’ve come a long way in our journey to frugal living, so as I look back at my biggest money mistakes, I want to kick myself.  I would give almost anything to turn back the clock, to go back in time as my older, wiser self and make better financial decisions.  I would cook at home more, put more money in savings, start investing much sooner, and embrace some of the amazing saving and making money ideas by some truly spectacular bloggers to set us up for a MUCH easier financial future.

{The Truth About Living Within Your Means}

Maybe you’ve made some of the mistakes I’ve made, or possibly you haven’t, but whatever your completion status on my 10 biggest money wasters, please learn from them!  Take to heart the suggestions I’ve given to stop wasting money on each of them, or head off disaster before it starts so you don’t have to learn the hard way like we did!

Here are my 10 biggest money mistakes + my hopes for you that you can avoid them:

Biggest Money Mistake #1: Car Payments

Unfortunately, our biggest money-water, is many other people’s top money waster as well.  And while I’m all for accepting personal responsibility, I do have to acknowledge that so many people fall into the car payment trap because not only is it completely normal to have a car payment, a new car is sort of a status symbol.

And to break up with your car payment, you (we) have to break up with our addiction to caring what others think.

It’s scary and it’s hard, and it requires quite a bit of discipline, but it can be done.  Once you get rid of others’ expectations for what type of vehicle you’ll drive, it is remarkably freeing.  We’re not yet completely free of our car payment (even though we did pay down $24,000 of debt last year) but we have reduced the interest we’re paying by about 70% by refinancing, and our strategy to pay down debt during 2016 is not only strong, it’s already going well.

{How We Saved $35,000 and 15 Years Off Our Debt: Our Refinance Story}

When we first got married, we quickly got to the point where we had $950 of car payments every month.  The interest rates were almost 8%, and you better believe that our insurance was astronomical.  Because of the refinance, our monthly payment is about $450, our interest rate is 1.9%, and unfortunately our insurance is still hella expensive.  We’re working on it, and are committed to seeing our last payment gone!

If you have car payments, I highly recommend that you check out these resources to help you deal with them:

If you think you've wasted money, you should see MY biggest money mistakes! Plus, I've got suggestions to help YOU avoid my mistakes!

Biggest Money Mistake #2: Vacations

Don’t get me wrong, vacations are absolutely ESSENTIAL to your mental health, emotional health, productivity at work and at home, and there is NOTHING wrong is seeing the world.

But incurring debt to take those vacations is a mistake that we, unfortunately, made in the past.  In some ways we were smart about it, opting not to take our honeymoon right after our elopement, and instead waiting until our first anniversary.  We did this knowing that we wanted to go somewhere spectacular (we eventually went to Hawaii) and the plan was to save up for the vacation during our first year of marriage.

As you can guess, that didn’t happen.  Part of it was our immaturity (we got married at 19), part of the problem was our complete lack of financial knowledge, and yet even more of it was our work situation.  I was in college full time, and my husband started out during our marriage working full time to support me as I went to college.  But then, 6 months into marriage he blew out his knee and couldn’t work for 8 months.

Yes, 8 months is a long time, but working with the VA to get his knee fixed to an extraordinary amount of time, and it placed a really heavy burden our new marriage.  I started working 60 hours a week at a local restaurant while still going to school to try and make ends meet, but it just wasn’t enough.  We should have cancelled our Hawaiian honeymoon, but to be honest we were so worn down that we just wanted to get away.

So we took the vacation, put at $2,000 on the credit card to cover it, and came back in an even worse financial situation than we were before.  We were relaxed, sure, but the moment we stepped off the plane the stress came back.

There are so many resources on the internet that can help you save money and still have amazing travel experiences, that there is no excuse for breaking the bank with travel:

Biggest Money Mistake #3: Expensive Coffee

There was a time when the Starbucks drive-thru was my best friend.  Ok, it was McDonalds, because that was the only coffee place in the town I went to college in, but still, it added up.  Rather than taking the time to brew my own coffee to fuel days filled with college courses, I took the lazy way out and hit the drive thru.

It was good, sure, but our credit cards were starting to show the abuse.

Buying expensive coffees was my mistake, one that I will never repeat again (at least not on a regular basis).  For myself, I don’t have expensive taste in coffee, I’m just slow in the morning, so making coffee at home isn’t the worst for me.  A big can of coffee costs $7 from Aldi, and lasts me nearly two months.  But for those with more discerning tastes, brewing better coffee at home, or using K-Cups to achieve a more “coffee shop” taste and feel will still save you money.  Or, you could get even more creative and finance your coffee habit with Swagbucks or surveys.

{How To Earn An Extra $1,200 A Year With Swagbucks – In 5 Minutes A Day}

Or maybe, breaking the expensive coffee habit just isn’t for you.  If that’s the case, recognize the expense for what it is, and look for other ways to cut back your spending.  Maybe you don’t place a lot of value of running the air conditioner constantly while it’s hot, or beef isn’t a necessity in your meal rotation.  Everyone’s frugality looks different, just don’t turn a blind eye to expensive habits.

Biggest Money Mistakes #4: Cheap Clothes

There was a time when we were cutting back that I bought only cheap clothes.  Granted, I was in college and working at a restaurant, so my wardrobe choices were pretty much up to me, and quality wasn’t a huge factor.

Then, when I graduated and started working as an accountant, I still kept up the cheap clothes trend.  Sure, it saved me money in the short run, but what I quickly noticed was that I was having to buy more clothes and shop more frequently.  Not only was buying more clothes costing me more money than it would have cost to buy decent clothes in the first place, each shopping excursion was another chance for impulse buys, purchases that weren’t thought through, and falling prey to the myriad of marketing schemes in the store.

{How To Build a Professional Wardrobe On A Budget}

Today, I’ve learned that a few quality pieces trump many cheap clothes.  Having clothes in my closet that I absolutely adore gives me a lot more incentive to take care of them, and the fact that I spent a fair amount of money on them helps motivate me to was them less, use homemade laundry detergent, and take other measures to make them last longer.

{Yep, You Can Save Money On Stitch Fix: Here’s How}

Biggest Money Misatke #5: Baby/Kid Toys

We were very, very blessed when our daughter was born.  Because of friends and family who had previously had children, we were give (0r loaned) basically all of the baby furniture we needed.  Then, thanks to tons of hand me downs + 3 baby showers, our daughter has more clothes than she cold ever wear.

But on the toy front we weren’t so lucky.

Kids – especially babies – don’t need a whole lot of toys, but we went a little crazy buying them for her anyway, at least for the first year of her life. Maybe it was the fact that I didn’t buy her ANYTHING else because I didn’t have to, or maybe it was just the excitement of a new baby, but I went overboard.

Adding in the fact that when you slap the word “baby” in front of anything – toys, clothes, furniture, food – the price gets at least doubled, well we spend way more than we should have.

{Help You Baby & Budget Get Along: My Secrets For Saving On Expensive Winter Clothes For Kids}

Once she hit about a year old, I started getting up the gumption to hit up garage sales for gently used and cheaply priced toys, as well as embraced just buying less in general.  I’ve started taking pride in finding the best pieces at the best prices, and then reselling them when she’s outgrown them for the same or greater price that I bought the for.

Biggest Money Mistake #6: Excessive Interest

Credit Cards, Car Payments, Mortgage Interest Rates, and even Student Loan Rates all can vary greatly from person to person.  In my case, I wasted money on all of the above.  3 years ago, when I started this blog, the hubs and I had credit card debt.  We only had one credit card, but it was almost maxed out, and was costing us 8.24% interest each year.  We also had car payments with excessive interest rates.

Thankfully, when we bought our house our interest rate was low, but we could’t say the same for my student loan interest rates.  And while all of those are horrible ways to waste money, the credit card interest was by far the worst.  Our income was fairly low, our expense were high, and so even the small extra payments we could put towards the credit card debt were usually swallowed up by interest.

Now that we’re free of credit card debt, it is so freeing!  And, while we utilize credit cards for the rewards still, we NEVER keep our credit cards in our wallets, and we don’t allow online stores to keep our credit card information (only our debit card) to keep up from impulse buying things that we cannot pay for in cash right now.  This may seem extreme, but we both love to shop, so this solution works for us.

We also keep track of our credit scores monthly, using some of these strategies, because any new forms of debt (0r refinancing, since we may purchase an investment property) depend on our credit to determine the interest rate:

If you think you've wasted money, you should see MY biggest money mistakes! Plus, I've got suggestions to help YOU avoid my mistakes!

Biggest Money Mistake #7: Private Mortgage Insurance

One of the biggest mistake many families make is paying PMI (Private Mortgage Insurance).  PMI is the premium you pay when you put down less than 20% on a home.  As a result, the bank views you as more of a risk that you will default on the loan, so you are required to pay the premiums on insurance against that risk.

Our PMI was pretty low – $40 a month because our mortgage was only $40,000 – but even that small amount added up to $480 a year!  Our PMI was very low, but the PMI on a $150,000 house runs many families $150 – $200.  That adds up to $1,800 – $2,400 a year, or even more for families with more expensive houses!

There are a couple of ways to get rid of the PMI on your mortgage: Increasing the value of the home, or refinancing.

If you increase the value of the home enough that your loan-to-value ratio is less than 80% (see your mortgage paperwork for the specific ratio) in most cases you can have an appraisal done and then request that the PMI be dropped off.  Some mortgages do not allow for this, requiring instead that you pay PMI for 5 years, regardless of the home’s value, which was the situation we were in.

So we went with option #2, refinancing.  We bought our home for $46,000, did some paint work, and then had it appraised for $87,000 2 years later.  This allowed us to refinance, thereby getting rid of our PMI, decreasing our interest rate just a bit, and knocking 15 years off the length of the loan – while still keeping our payment the same.  If you’re interested in learning more about the refinancing process or our experience, you can check out the detailed post here.

Biggest Money Mistake #8: Restaurant Food

When I think back to how much money we wasted on fast food, casual restaurant food, and takeout when we were first married, I hate myself a little.  You can see this reflected in the first budget, as well as tons of posts I have addressing food costs.

I have wished, so many times, that we had gotten off the eating out train, saved money, and eaten healthier.  We can’t change the past, but we can change how much we’re currently spending on food.

If you are struggling with eating out, I have some great ways to save on food.  Some take as little as 5 minutes, while others take more effort.  Check them all out here:

One of the best things about the internet is the ability for it to save $1,000’s if you look hard enough.  There are sites dedicated to making extreme couponing as easy as possible, making extra money, and even for finding the best online deals.  There are other amazing blogs dedicated to helping you live better on less money, budget, and even make your career better so you can earn more money from it!

The internet is an amazing thing, and I so wish that I had taken advantage of it sooner to buy drugstore essentials like shampoo, razors, makeup, and even medicines at huge discounts.  I’ve never been an “Extreme Couponer” (although I did come pretty close there for a while) but I do love shopping the best deals at CVS and Walgreens each week.  Sites like The Krazy Coupon Lady make this take less than 15 minutes a week, and I usually save 80% – 100% on items that we need or will use in a timely manner around the house.

When my husband was inured and off work for 8 months, I discovered couponing and embraced it to save money, but I didn’t always do it right.

Instead of buying only things we would use, I bought everything that was a good deal, regardless of it’s level of use to us, and ended up wasting more money than I saved.  Now I’m smarter about my spending/couponing habits, and it’s definitely paid off, since we routinely stick to a $450 “everything” budget.  (Our Everything budget is groceries + household goods)  Could we get it lower?  Probably, but $450, for us, us a happy medium between ease-of-use and frugality.  Plus, it’s much less than many families spend on groceries alone every month.

Biggest Money Mistake #10: Diapers

Diapers are a horrible expense for many parents out there, and I’m going to have a very honest moment right now: We are currently wasting money on diapers.

When I found out I was pregnant, I immediately started couponing for diapers, and I built up a stockpile that allowed me to not buy ANY diapers for 1 1/2 YEARS – at an 82% discount (I do the math + explain my strategy in this post).  But after a year and a half, I just got busy.  “I didn’t have time” was my excuse of choice, but in reality it was just an excuse.

Now, my excuse is that we’re potty training, and every case of diapers we buy “will be the last.” Ha.

Anyone who’s ever potty trained knows where we’re at right now, and it sucks.

But, I have been greatly cutting down on the number of diapers we’re going through per day, because when she’s home and not at the babysitters, we’re going diaper-free.  Yep, it’s all naked baby butts all the time at the Lindow household, so we desperately hope that anyone who decides to stop by calls first, so there’s not a scandal!

If you’re pregnant, trying to get pregnant, or have kids in diapers, check out this post I wrote that details my diaper savings strategy + how you can duplicate it in about 15 minutes a week!

Like it or not, everyone makes money mistakes.

There is absolutely no way that you can head off every single mistake, no matter how much personal finance education your school or parents made sure you left home with, or how much research you do.

But you can minimize mistakes by recognizing them before they go to far, heading off mistakes you may not have thought of, and correcting mistakes once they’ve happened.

No one is perfect – especially not yours truly – but that’s why I love the personal finance community so much.  There is an unbelievable amount of transparency within the community of personal finance bloggers + our loyal readers and it’s not for our own personal gain.  It is mean to help people, as many people as possible, make smart financial decisions.

So let’s help each other today: what is the biggest thing you’ve wasted money on?  How did you fix it?  Share you stories in the comments to help others!

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This post may contain affiliate links.  See my disclosures for more information.